World View & Market Commentary. Forest first; Trees second. Focused on Real & Knowable facts that filter through the "experts" fluff and media hyperbole. Where we've been, what the future may hold and developing a better way forward.

Saturday, August 13, 2011

Friday, August 12, 2011

Ban the shorts! LOL, has never worked, will never work. It is simply more proof of just how un-free the “markets” really are. Still, it’s a temporary excuse to suck the suckers back in so that the HFT boys can churn profits from the dimwits who still believe in the “Fed’s” fantasy… and Santa, the Easter Bunny, and Tooth Fairy.

So stocks are higher for now, the dollar is lower, bonds are higher, oil is higher ($87), gold & silver are slightly lower, and food commodities are in the same range of the past two weeks – high enough to make one choke.

The completely inane Retail Sales report came in at a .5% “growth” rate month over month in July. This is completely absurd and is a closer proxy of money printing than anything else. This report suffers from survivor bias and is artificially elevated by massive errors in the way we under report inflation. Even at that, it was a miss as .6% was expected by the clowns. Speaking of circus callers, here’s Econoshill:

Highlights
Retail sales strengthened in July, led by a spurt in auto sales but with support from most other components. Overall retail sales in July jumped 0.5 percent, following a 0.3 percent rise the month before (originally up 0.1 percent). The July boost was just below the consensus forecast for a 0.6 percent gain. Excluding autos, sales were healthy, posting a 0.5 percent increase, following a 0.2 percent rise in June (originally flat). Analysts had estimated a 0.3 percent increase. Gasoline sales actually rose during the latest month, supporting ex autos. Sales excluding autos and gasoline in July advanced 0.3 percent, following a 0.5 percent rise in June.

Overall, the consumer is still spending, although the pace is hardly gangbusters. Despite difficulties in the financial markets, the consumer has not withdrawn to the sidelines.

On the news, both equity futures and Treasury rates firmed.

“Consumer” Sentiment is released just before 10 Eastern for August. If their sampling contains anything from last week it should be interesting to say the least. Business Inventories also comes out at 10.

The S&P 500 produced a “Death Cross” yesterday which is when the 50 day moving average crosses below the 200dma. This is a very negative technical indicator and will provide strong overhead resistance especially with the 50dma down slopping so steeply:

The DOW has yet to cross but is only a few days away. The RUT also produced a Death Cross yesterday, the NASDAQ is going to cross today, and the Transports aren’t far behind.

Below is a 30 day, 30 minute, chart of the DOW. Here you can see a potential rising wedge forming that gives the market a little more room to rise before its next down stroke. There is a small gap in the chart about the 11,300ish area that may fill first:

What I read in the mainstream regarding these “markets” and our economy is just laughable, a joke. Did you know that “Made in China” is GOOD for Americans! That’s the CNN headline. “Insiders Go on a Buying Spree!” “Warren Buffett – “The Lower Stocks Go, the More I Buy!”” “Hiding Cash in Tampon Boxes – and Other Sneaky Spots.” “Wimpy Double-Dip Forecasts Could be Wrong,” but “Postal Service to layoff 120,000 jobs (220,000 by 2015)." These are just a few of the jokes that pass for business "news."

Like I said, laughable. And people wonder why their homes are underwater and their retirements are simply worth less if anything at all? The clowns are running the circus – I hope we all know better now, and aren’t giving it all away…

Thursday, August 11, 2011

Stocks continue their slide this morning (bouncing as I post this). Note that the trend is for futures to ramp overnight, but in the morning as the volume picks up the selling overwhelms the attempts to levitate the markets. That intervention is SICK, a sure sign that ordinary people have no business “investing” in such a mobster controlled environment. The dollar is higher, bonds are slightly lower after going parabolic the past couple of weeks, gold is also pulling back slightly following its parabolic move and another new record high, silver is flatware, and food commodities have been moving mostly sideways.

The Weekly Unemployment number came in at 395,000, down from last week’s 400k, which was revised higher, of course. While this number is below the psychological 400k mark, it still does not indicate any job growth, in fact just the opposite – any number above 350k indicates a shrinking workforce and it has been YEARS above that figure. An otherwise very vanilla report, here’s Econospin:

Highlights
Initial jobless claims, for the first time since early April, are under 400,000, at 395,000 in the August 6 week in what is a positive indication of job market improvement. The four-week average of 405,000, down 3,250 in the week, is the lowest since mid April and is down now for the sixth week in a row. A month-ago comparison with early July shows a 13,000 decline in what hints at improvement for the August employment report.

Continuing claims also show improvement, down 60,000 in data for the July 30 week to 3.688 million. The four-week average is down for a third week in a row at 3.719 million. The unemployment rate for insured workers slipped one tenth to 2.9 percent.

The government is not citing any special factors in the data which is a positive surprise given possible distortions tied to summer retooling in the auto sector and to the temporary shutdown of the Federal Aviation Administration. Stocks futures came off lows, but only briefly, following this report which however was accompanied by an unfavorable trade report.

The International Trade Report indicates that both imports and exports are declining and that despite the lower oil prices we continue to import far more than we export. Ross Perot showed us all what would happen with “free” trade, and here’s the giant sucking sound you hear:

Highlights
Despite help from lower oil, the U.S., trade deficit worsened further in June to $53.1 billion, following the unexpected ballooning of the gap the month before to $50.8 billion (originally $50.2 billion). The June shortfall came in wider than the market median forecast for $48.0 billion. Exports dropped 2.3 percent after slipping 0.5 percent in May. Imports dipped 0.8 percent, following a 2.9 percent jump the prior month.

The jump in the trade deficit was led by the nonpetroleum gap which widened to $36.9 billion from $33.7 billion in May. As expected, the petroleum goods gap narrowed to $29.6 billion from $33.7 billion in May. The services surplus nudged down to $14.5 billion in June from $14.6 billion the month before.

While the economy appears to be getting a boost from lower oil prices, the reversal in exports (hopefully temporary) is an offset.

Gee, I’d like to know exactly how the economy appears to be getting a boost from lower oil prices? What inane baloney. Oil is still above $80 a barrel, and if you go back in time and look, every single time oil rises above that mark, a stock market crash is not far behind. The only reason this one took a while was QE2, but it was QE2 that was responsible for $100+ oil in the first place – so it is just an example of how you cannot print your way to prosperity.

I’ve got a good rant in me about the criminals, but I’ve said it all a million times before, so I’ll let it go for now. The math is impossible, the “market” is 100% not real, and nearly 100% fluff. It's the end of the world as we know it, and I feel fine... because I'm not invested in it, and I got REAL.

Wednesday, August 10, 2011

Stocks are lower following yesterday’s fine display of market manipulation – twice. The dollar is higher, bonds are higher, oil is lower, gold is higher still, silver is holding steady, and food commodities are generally higher.

The Great and Mighty Oz behind the curtain spoke… and well, he laid an egg. Oh boy, rates will stay low until mid 2013 at least! Paarrrtttaaayyyy! My inane brokerage commentary said that eased investor fears about the future, LOL, and that it had a calming affect upon the market, LOL some more. Yeah, that and a few billion well placed fluff dollars to keep the bottom from falling out and get the shorts to cover.

As if the Fed is in control of rates without an even more massive QE program… without that, no way. Note the mantra of the market is now very easy – when progressively bigger QE takes place, market goes up. When QE ends, market goes down. Gee, “investment” just got easy. Well, except for the rip your face off 600 point artificial swings that is.

So, if you still have money in these markets – then I think you are plain old fashioned nuts. Anyone who hasn’t learned their lesson by now should be broke, and hopefully their DNA won’t filter to future generations. Not to mention that providing trading fees to these clowns can be considered downright un-American. No, sorry central banks, hiding behind false “Federal” monikers and the American flag don’t make your actions any less traitorous – in fact more.

How’s that for market advice?

What should you be doing? You should get REAL. Support real economic activity that you know is not backed by central banking and their financial engineering. It is possible to find. To illustrate my point, in my new yacht joint ownership program I could approach the Wall Street crowd and offer to let them securitize the debt of my customers – you know how it would work… 10% down, $2 a month payments for the rest of your life, and a boat that is immediately “under water.” They would then “engineer” a lovely financial product, S&P would slap a Triple-A moniker on it, and it would wind up in your “conservative” retirement account!

Instead, I am directly matching investors to customers – in a truly conservative manner. Thus the boat is never under water, and there are NO banks involved in the financing or construction of the boats whatsoever. This produces real jobs, right here in America. Does that sound familiar? Kind of old-fashioned and quaint? Well, that’s how business needs to be done, at least if you want a clean conscious.

My take is that the macroeconomic debt saturation condition will continue to produce an out-of-control marketplace to go along with many “other events” until that debt saturated condition is cleared. The math is IMPOSSIBLE, and thus it will take WAY more than just some new “debt commission.” I don’t care what figure they come up with or how they plan to “save” money – it will NOT WORK. For REAL economic health to return, it will require clearing the debt, clearing the FRAUD, and clearing out those WHO falsely were allowed to create money from nothing and use it to capture the three branches of government. We’re talking serious stuff here, it won’t happen without major league “other events” occurring – and yet it will happen.

The youth burning London? Slapping old men upside the head? Get used to it – the disenfranchised youth of London are no different than the disenfranchised youth of Egypt. The difference between their condition and those shiny multi-million Pound buildings their burning is night and day. If you don’t believe the economy and the sucking of wealth from society aren’t behind that, well, you probably still have your money in the “markets,” and thus you are a very slow learner.

Fraud? Try today’s MBA’s Purchase Applications Report. Let’s see, Purchase Applications down .9% - believable… Refinance Activity up 30.4% (!!!!) in just one week! Completely unbelievable – as in FRAUD. Yet who is there to call these Bozos out? Not Econopaytoplay:

Highlights
The drop underway in long rates tripped a giant 30.4 percent surge in refinancing applications during the August 5 week. Applications are now at their highest level of the year while rates are at their lowest with 30-year mortgages averaging 4.37 percent, down eight basis points from the prior week. But low rates unfortunately aren't raising much demand for home purchases as the purchase index, down 0.9 percent in the week, remains depressed.

What bullshit. Fraud plain and simple, and that’s the extent of your “economic data” for today.

Tuesday, August 9, 2011

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.”
— Norm Franz

Equity futures were down hard overnight but recovered in the low volume overnight, perfect for intervention, hours… and are now positive prior to the open – as always, buy into their fluff at your own risk. By the way, if the latest market action hasn’t convinced you get real with your investments and to stop feeding the criminals, then probably nothing will. The dollar is down, bonds are down, oil ran all the way down to $75 overnight but recovered all the way back up to $82 (are you sick yet), gold blasted into orbit reaching $1,782.50 (!!), interestingly silver is down (hmmm), and food commodities are higher while the major news networks attempt to convince you that famine in Africa is something new, that you should care and focus your attention on that, and that money policies have nothing whatsoever to do with the number of people starving throughout the world.

Meanwhile riots on the streets of London – buildings burning. Again, anarchists, nothing whatsoever to do with money policy. M-u-s-t c-r-a-c-k-d-o-w-n, t-o r-e-m-a-i-n i-n c-o-n-t-r-o-l! Is that northern Africa I smell?

The NFIB Small Business Confidence Index fell for the fifth straight month from 90.8 to 89.9. Below are the NFIB’s comments along with the entire report, which as usual is a good read:

Fifth Consecutive Month of Decline
For the fifth consecutive month, NFIB’s monthly Small-Business Optimism Index fell, dropping 0.9 points in July—a larger decline than in each of the previous three months—and bringing the Index down to a disappointing 89.9. This is below the average Index reading of 90.2 for the last two-year recovery period. Expectations for future real sales growth and improved business conditions were the major contributors to the decline in optimism. With the repercussions of the debt compromise yet unknown, next month’s report will provide a more complete picture of the reaction on Main Street

"Given the current political climate, the protracted debate over how to handle the nation’s debt and spending, and the now this latest development of the debt downgrade, expectations for growth are low and uncertainty is great," said NFIB Chief Economist Bill Dunkelberg. "At the two year anniversary of the expansion, the Index is only 3.4 points higher than it was in July 2009. And considering the confidence-draining performance of policy makers, there is little hope that Washington will stop hemorrhaging money and put spending back on a sustainable course. Perhaps we might begin referring to the 'Small-Business Pessimism Index' from now on."

Productivity and Costs were just announced, with nonfarm Productivity falling from a supposed +1.8% in Q1, to -0.3% in Q2 – oops. To make this report worse, Unit Labor Costs rose during the same time from +.7% to 2.2%.

And with all that’s going on, we get to hear from the moron Bernanke this afternoon, at 2:15 Eastern, tell us how he is going to continue to rob us, manipulate us, and in general cause more damage than ever to the United States people while the narcissists run off with the loot – oh, and Bank of America – you will be assimilated, resistance is futile.

Interesting, isn’t it, that all the rats are bailing off the ship just prior to Bernanke’s announcement? Gee, I wonder why…

The Federal Reserve said D. Nathan Sheets quit as the central bank’s chief international economic adviser after almost four years in the position and a day before policy makers meet.

The Fed, in a statement today in Washington, didn’t say why Sheets, 46, is leaving the institution. As director of the Division of International Finance, Sheets briefed Chairman Ben S. Bernanke and other officials on economic developments outside the U.S. and represented the Fed at international meetings.
Steven B. Kamin, a deputy director of the division, will serve as acting director, the Fed said.

Sheets is leaving as European leaders take action to avert a widening of the continent’s sovereign debt crisis and U.S. officials gauge reaction to the Aug. 5 downgrade of the country’s AAA credit rating by Standard & Poor’s. The Federal Open Market Committee meets tomorrow in Washington.

“Nathan has provided invaluable insight and stellar leadership at a time of great volatility in the world economy,” Bernanke said in a statement. “We thank him for his dedicated service and wish him well.”
Sheets is using annual-leave days between now and his official departure date of Sept. 9 and won’t attend tomorrow’s FOMC meeting, said David Skidmore, a Fed spokesman.

The departure means all three of Bernanke’s top staff advisers have left their positions or announced their departures in the last 13 months. Brian Madigan, former director of the Division of Monetary Affairs, retired last year, while the Fed said in May that David Stockton, director of the Division of Research and Statistics, is retiring Sept. 30.

Sheets, who like Bernanke earned a Ph.D. in economics from the Massachusetts Institute of Technology, joined the Fed as an economist in 1993. As division director since September 2007, he led a staff of about 120.

Hmmm… I wonder what Sheets learned at MIT that Bernanke didn’t? Maybe a better sense of when to jump the Titanic? Hey Bernake, time to get one that floats!

Oh, I know, that was harsh. Well, you would think that after injecting trillions upon trillions of worthless debt that the clue light might come on at some point. I was just looking at the Employment Population Ratio again, noting that it has now fallen to the lowest point in this ongoing macroeconomic debt saturation saga. This all by itself completely discredits the claim of “job creation” and any notion that there ever was any “recovery.”

That chart is telling you that a smaller and smaller percentage of the population is working.

Recovery? What there was is a Bernanke money explosion:

You want to talk about bombs going off and financial “terrorists” – there you go.

Here in Washington State the Governor just notified all agencies, including education, to expect 10% across the board cuts… that the economy is not improving and that the deficit situation is getting worse quickly. Yesterday, S&P downgraded Washington State’s second largest city, Tacoma… and we’re in a relatively good state.

The VIX, of course, is shooting the moon, having jumped into rarified air above an important resistance level:

The RUT is already in Bear Market territory, having fallen more than 20%. The SPX, in just a few short days, has plummeted all the way back down to the 50% retrace Fibonacci of the entire prior decline:

Obviously there can and will be violent reversals with this type of manipulation, errr, I mean completely free market action. There were 1,292 new 52 week lows on the NYSE and only 3 new highs. Really… safe and sane is required for our fireworks, but we have yet to throw the little boys and their rob you toys out of our lives. “Other Events” are on the way and underway…

Monday, August 8, 2011

The impossible math is finally catching up with the stupid who refuse to believe there is anything “fundamentally” wrong with the U.S. economy. Impossible math just is, and those who did not and still cannot see it for what it is simply must be very close relatives of the Gump family.

Stocks are continuing to act like a submarine avoiding the depth charges, the dollar fell on the S&P downgrade but is now rising with the deleveraging, bonds are higher too even though they are worth less (subtle pun), oil is crashing now down to $82, Gold is leaping tall buildings in a single bound now above an amazing $1,700 an ounce, silver is higher too, and food commodities are lower.

There are no meaningful economic reports today, the data is light all week with the highlight of the week the “Fed’s” FOMC manipulate you some more meeting of real world irrelevance. Well, I guess creating the debt saturation Ponzi is relevant, unfortunately – especially since these criminals are the source of the impossible math. And like a festering boil, it will only get better if you lance the wound and remove the poisonous traitors that are sickening the overall system.

The S&P downgrade is a big deal. S&P is owned by McGraw Hill, who in turn is owned by a very wide range of institutions, thus it’s difficult to pin a manipulate the market moniker on them – although they most certainly have by overrating just about every debt they monitor including our nation’s debt.

China says US 'Good Old Days' of Borrowing Over, and their reasoning’s may sound insulting to a Gump relative, but to anyone with any sense whatsoever it is just simply the truth (remember that… quaint and old fashioned, I know) “China -- the United States' biggest creditor -- said Washington only had itself to blame for its plight and called for a new stable global reserve currency.

"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's official Xinhua news agency said in a commentary.”’

Traitor Buffett, of course, prefers to ignore the impossible math he helped to create and claims that S&P made a mistake. The private “Fed,” of course, also denies reality and responsibility saying that it simply doesn’t matter (except when we want to threaten the markets), that there will be no change to the bond markets. The stupid here is not the “Fed” criminals, it’s us for not yanking their lying you-know-whats out of our money system.

There were 852 new 52 week lows on the NYSE Friday. As a reminder, the H&S targets are 1,130 on the S&P, 10,900 on the DOW. Does TA matter anymore? Well, the G7 is supposedly going into an emergency meeting this week and according to them will “do whatever it takes” to stabilize global markets. In other words they are going to backstop the symptoms of impossible math with more impossible math on a global scale – lovely, that’ll work.

Whatever… none of its real, your loss in the markets is definitely someone else’s gain. I’ve been warning about the market fluff forever, oh, and I’ve been telling anyone who will listen to own gold ever since it was $250 an ounce. Is now the time to sell? No, not while you still have the G7 thinking they can fluff up global markets and not while the private “Fed” is still in existence.

It’s going to take “other events” to clean them and all their ponzi debt schemes out. Those other events are percolating just below the surface – you can feel the tension, it’s there. Thirty dead Americans in Afghanistan, tensions rising in Syria, a gunman goes on a rampage killing 8 and it barely gets noticed in the headlines.